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Is Uber Becoming A Monopoly?

Written By Brian Hicks

Posted April 9, 2015

uber car 600x274

Every startup nowadays is trying to become the next Uber in terms of success, but for companies in the ride-sharing and car-hailing industry, the best way to get ahead is to prove that you have something different to offer.

Some might say that in its current as well as projected state, Uber is unattainable. With its unprecedented growth and ridiculous amount of funding, Uber has an intimidating share of the on-demand transportation space.

The second most valuable privately-owned tech startup behind Chinese-smartphone giant Xiaomi, Uber is worth $41.2 billion. Its value is only expected to rise as its total revenue for 2015 is projected to hit $10 billion.

At this point, it’s clear that the ride-sharing race is for second place, only Uber can be Uber and any company that wants to stay competitive needs to bring something new to the table, probably to a niche market.

For instance, a new car-booking app called Ride launched this week. It distances itself from Uber by marketing its service directly to employers rather than to consumers.

The app will specialize in grouping co-workers looking to carpool to work and commute costs.

At the same time, Ride will have a hard time getting out from under Uber’s shadow because it was co-founded by Uber’s former chief technology officer, Oscar Salazar, and is owned by TPG Growth, one of Uber’s early investors.

Ride is already branding itself as a complementary service instead of a competitor, which will work towards it being considered without being compared to Uber.

Healthy Competition

The Census Bureau estimates that 8.1% of the American population commutes an hour or more to their urban workplaces. As Uber primarily operates within cities, that leaves a potential market share of 25 million people for Ride to claim.

While Uber clearly has a strong foothold in ground transportation for business in cities, using Uber’s services for a daily commute from a non-urban area would be prohibitively costly. Uber CEO Travis Kalanick

Ride hopes to establish itself among commuters by occupying a space in which no other option is available. 

Another contender is FlyWheel or the non-disruptive Uber, in that it connects people with taxi cabs.

In spite of its efforts to skirt Uber altogether, FlyWheel might have set itself up for a collision as Uber has had numerous confrontations with taxi companies since its inception.

Then there’s Uber’s most direct competitor, Lyft, which has begun to focus on the services it already provides that have the least in common with Uber’s services.

Given Uber’s belligerent reputation, Lyft chose to emphasize Lyft Profiles, which serves to acquaint driver and passenger before they meet in an attempt to give riders a more personal experience in contrast with the more practical Uber.

The challenge for the would-be Uber usurpers is to find a need that matters to people when Uber’s existing services already satisfy so many of them.

As competition ramps up, look for a shakeout in the near future. Those who are still standing after the dust settles, Uber or otherwise, will likely go on to thrive.